Book Review: Birnbaum's Global Guide To Winning The Great Garment War Third Horizon Press limited Isbn 962-85878-1-1 By : Steve Woloz C/o Steve Woloz Associates Inc. January 12, 2002 "It's a war out there. People are dropping like flies. The industry has never been this bad." David Birnbaum, a founder of the consulting firm Third Horizon Ltd., opens his text "Birnbaum's Global Guide to Winning the Garment War" with this chilling observation. Birnbaum draws upon his 20 plus years of experience in the garment industry to make four assertions, which he repeatedly substantiates over the course of the guide: Competition in the garment industry already is, and will increasingly become global in scope. Participants must be willing to look beyond their borders in order to maintain their competitiveness. Inexpensive direct labour alone does not equate to low per unit costs. All costs must be considered. Birnbaum expands on this theory to include the general rule: low CMT (cut/make/trim) costs will not necessarily result in low LDP (landed, duty paid) prices. Effectiveness in controlling direct costs is but one component of success. The quality of one's product, adaptability and the ability to deliver quickly and consistently can no longer be considered afterthoughts. Failure in any one of these domains will ultimately drive up those costs which are more difficult to measure, and thus largely ignored by less competitive organizations (e.g. rework/scrap, lost sales, short shipment/late penalties, etc.) Suppliers wishing to compete in the global market must assume as much responsibility as possible in the value added process. The more tasks that they successfully perform, the more that they become indispensable business partners. Most of the text is devoted to arming readers with a weapon called "Full Value Cost Analysis" (FVCA). Birnbaum goes to great lengths to show that cost savings realized by manufacturing in or sourcing from less developed nations can very easily be offset by other variables in the cost equation. In short, Birnbaum claims "unless you've read this book [and are now using FVCA], you're probably not working with the lowest cost". Included with the text is a one hundred-and-one step flowchart depicting the entire manufacturing process from attending fabric shows to shipping the finished product. Birnbaum sensitizes readers to the implications of choosing to either perform or outsource these activities, all in the context of enhancing one's competitiveness and developing (and sustaining) profitable business relationships. The competitive firms of tomorrow will first determine exactly what its product is, and only then will they be able to determine which activities can best be performed in-house and which activities should be sourced from a supplier. The firms who choose to simply buy from "zero service" factories will have to compensate in all other areas of the manufacturing process, often resulting in intangible cost overruns. For these reasons, Birnbaum predicts that those suppliers who will successfully assume and deliver the greatest amount of service at the lowest cost will emerge victorious in the garment war. The final section of the guide focuses on the impact of international trade regulations (e.g. quotas, duties, etc.) and assesses the infrastructure of several countries/regions in order to ultimately predict who is best and worst suited to compete in the twenty first century. Costing spreadsheets appear throughout the text to prove Birnbaum's points and serve as models for readers when they conduct their own analyses. The spreadsheets are well explained and will be understandable to those not accustomed to costing analyses, however, it should be noted that stopping to carefully read each one may detract from the flow of the guide. Thus, readers should be cautioned that the analyses are there to mathematically illustrate Birnbaum's points and can be returned to later at their convenience. Birnbaum makes the guide easier to read by filling it with humorous cartoons and anecdotes (shown below) , as well as sixty five insightful case studies featuring characters (like Louie the Lip and Herbie the Mouth) that will be all too familiar to anyone who has ever worked in the garment industry. "Economists say that markets operate with complete knowledge and that business people always try to work in their own best interests. Obviously they have never talked to anyone in the garment industry". In conclusion, I would highly recommend this guide to anyone who is contemplating getting into, getting out of, or triumphing in the Great Garment War.

 

Steve Woloz Associates Inc. 5763 McAlear C.S.L. (Montreal) Quebec H4W 2H2 Tel: (514) 944-8241 E-Mail: s.woloz@swaassoc.com